BAA in New York airports talks

Britain's leading airports operator BAA is poised to pull off its biggest coup since privatisation in 1987 by taking over the running of New York airports John F Kennedy and LaGuardia. Its US subsidiary BAA USA has been named by New York City Mayor Rudolph Giuliani as the preferred bidder to succeed the out-of-favour Port Authority as the operator of the two Big Apple hubs.

The mayor said: 'New Yorkers and visitors to the city are not getting the kind of service they deserve - and that a great city deserves - from our airports. The Port Authority has proved itself unable or unwilling to maintain JFK and LaGuardia as first-class airports. That is why the city is very excited to be working with BAA USA Inc. We have every expectation that, under new management, New York City's airports will thrive in a manner that befits their status as gateways to the capital of the world.'

If BAA wins the contract it will give the company an extraordinary clean sweep of New York's three international airports as it already runs the retail operations at Newark in New Jersey. It also operates airports at Indianapolis, Pittsburgh and Harrisburgh.

BAA, which has been in talks with New York since October, beat off competition from airport operators in Holland, Switzerland and Germany. It will now enter detailed negotiations about the terms of its contract.

If agreement is reached, BAA will initially enter an 'over-sight' and consulting relation-ship with the two airports before assuming a full management role. Officially, the Port Authority's lease does not expire until 2015 but this is likely to be ended early if terms are agreed with BAA.

JFK International was opened in 1948 and handles 30 million passengers a year, making it about half the size of Heathrow. LaGuardia, predominantly a domestic hub, started as a private flying field in 1929 and has 22 million passengers annually, about two thirds as many as Gatwick. BAA would say no more than that it was 'pleased' to be in sole negotiations with the City of New York about the two airports. It had no idea how long it would take to complete a deal and declined to say how much the contract would be worth.